Launched on 04/26/2017, the Franklin LibertyQ U.S. Equity ETF (FLQL) is a passively managed exchange traded fund designed to provide a broad exposure to the Large Cap Blend segment of the US equity market.
The fund is sponsored by Franklin Templeton Investments. It has amassed assets over $1.18 B, making it one of the larger ETFs attempting to match the Large Cap Blend segment of the US equity market.
Why Large Cap Blend
Large cap companies usually have a market capitalization above $10 billion. They tend to be stable companies with predictable cash flows and are usually less volatile than mid and small cap companies.
Typically holding a combination of both growth and value stocks, blend ETFs also demonstrate qualities seen in value and growth investments.
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive counterparts if all other fundamentals are the same.
Annual operating expenses for this ETF are 0.15%, making it one of the cheaper products in the space.
It has a 12-month trailing dividend yield of 1.42%.
Sector Exposure and Top Holdings
ETFs offer a diversified exposure and thus minimize single stock risk but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Information Technology sector--about 19.60% of the portfolio. Consumer Discretionary and Consumer Staples round out the top three.
Looking at individual holdings, Texas Instruments Inc (TXN) accounts for about 1.12% of total assets, followed by Apple Inc (AAPL) and Intl Business Machines Corp (IBM).
The top 10 holdings account for about 10.68% of total assets under management.
Performance and Risk
FLQL seeks to match the performance of the LibertyQ US Large Cap Equity Index before fees and expenses. The U.S. Large Cap Underlying Index seeks to achieve a lower level of risk and higher risk-adjusted performance than the Russell 1000 Index over the long term by applying a multi-factor selection process, which is designed to select equity securities from the Russell 1000 Index that have favorable exposure to four investment style factors quality, value, momentum and low volatility.
The ETF return is roughly 17.19% so far this year and is up about 8.71% in the last one year (as of 08/05/2019). In the past 52-week period, it has traded between $26.18 and $33.24.
The ETF has a beta of 0.88 and standard deviation of 11.39% for the trailing three-year period. With about 253 holdings, it effectively diversifies company-specific risk.
Franklin LibertyQ U.S. Equity ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, FLQL is a reasonable option for those seeking exposure to the Style Box - Large Cap Blend area of the market. Investors might also want to consider some other ETF options in the space.
The iShares Core S&P 500 ETF (IVV) and the SPDR S&P 500 ETF (SPY) track a similar index. While iShares Core S&P 500 ETF has $179.48 B in assets, SPDR S&P 500 ETF has $272.95 B. IVV has an expense ratio of 0.04% and SPY charges 0.09%.
Passively managed ETFs are becoming increasingly popular with institutional as well as retail investors due to their low cost, transparency, flexibility and tax efficiency. They are excellent vehicles for long term investors.
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
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Franklin LibertyQ U.S. Equity ETF (FLQL): ETF Research Reports
International Business Machines Corporation (IBM) : Free Stock Analysis Report
Apple Inc. (AAPL) : Free Stock Analysis Report
iShares Core S&P 500 ETF (IVV): ETF Research Reports
SPDR S&P 500 ETF (SPY): ETF Research Reports
Texas Instruments Incorporated (TXN) : Free Stock Analysis Report
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